Political systems

Decentralisation

Key to DFID's strategy for making government work for poor people is to build state capability for political systems that give a voice to poor people and ensure efficient provision of basic services for all. It identifies decentralisation as an important approach, where appropriate, to making new democracies more inclusive and representative.

Decentralisation can take several forms:

1. Administrative Decentralisation, or 'Deconcentration' of administrative responsibilities from central agencies and ministries to field offices.
2. Fiscal Decentralisation, or the transfer of funds and/or revenue-raising powers from higher levels to lower levels in political systems.
3. Devolution of decision-making powers and funds, and sometimes revenue-raising powers from higher levels in political systems to elected bodies at lower levels. Also called 'Democratic Decentralisation'. 
4. Delegation of authority for certain functions from government to specialised agencies and service managers at lower levels in the system.

Decentralisation initiatives often involve complex mixtures of these forms, with different aspects of decentralisation implemented to varying degrees depending on the context.

Page contents

Where is a good place to start?

Decentralisation appears to offer a major alternative approach to the problems of unresponsive central government by enabling more direct participation at local levels. But the realities of decentralisation are often very different from planned or formal arrangements. Decentralisation in practice is affected by the political aims of those who introduce reforms. The centre must devolve resources and power sufficiently to local government to allow it to fulfil its esponsibility. And it takes time for such processes to take root and for capability at local levels to develop. In transitional and developing countries experience is tempered further by resource constraints and poverty.

The key texts below provide an overview of the different forms of decentralisation, highlight recent trends and lessons learned, and examine contextual factors affecting the performance of decentralised systems.

Manor, J. 2003, 'Local Governance', paper prepared for Sida's Field Offices on Decentralisation, Institute of Development Studies, Brighton
When it works well, democratic decentralisation can have many benefits and its promise is considerable. However, its potential as a force for reducing poverty is limited and in many cases it works less than well. This report by the Institute of Development Studies summarises the key issues surrounding local governance and decentralisation in less developed countries (LDCs) and examines some recent trends. 
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Crook, R. and Manor, J., 1998, ‘Conclusions’, Chapter 6 in Democracy and Decentralization in South Asia and West Africa, Cambridge University Press, Cambridge, pp. 271-304
This text concludes that under the 'right conditions' decentralisation improves the targeting of benefits to vulnerable groups, increases participation and leads to effective bottom-up planning. However, the 'right conditions' are difficult to obtain and without them, decentralisation can be expensive and inefficient.
Full document: available via document delivery. Please see document summary.

Norwegian Institute for Urban and Regional Research, 2003, 'Synthesis Study on Supporting Decentralisation and Local Government - Lessons Learned, Good Practices and Emerging Issues', Report prepared for the DAC Working Party on Aid Evaluation, Organisation for Economic Co-operation and Development
This study for the OECD/DAC Working Party on Aid Evaluation provides a useful overview of key issues and current thinking on all aspects of decentralisation, including political decentralisation and poverty alleviation, fiscal decentralisation and challenges of sustainability, and donor support. The study outlines lessons learned and best practice, and makes recommendations on how to improve donor approaches to decentralisation and local government.
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Decentralisation and politics

Decentralisation encourages policy makers to focus on poverty reduction. The extent to which local government policies in areas such as public investment and service delivery are pro-poor depends on representation and participation of local citizens and the responsiveness and accountability of local government.

The texts below examine the relationship of decentralised government with local citizens, notably the poor.

Crook, R. and Sverrisson, A., 1999, 'To What Extent Can Decentralised Forms of Government Enhance the Development of Pro-poor Policies and Improve Poverty-alleviation Outcomes?', World Bank, Washington D.C.
This study examines the impact of decentralisation on participation, responsiveness and poverty in 11 countries. Accountability of local government, central support in funding and staffing, and a sustained commitment to decentralisation were found to be conditions of success, and were apparent in only one of the cases. 
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Blair, H., 2000, `Participation and Accountability at the Periphery: Democratic Local Governance in Six Countries', World Development, vol. 28, no. 1, pp. 21 - 39
This comparative study shows how democratic governance has improved representation and participation but that these often had no real effect on empowerment, equity or poverty reduction. The reason for this is that vulnerable groups are generally too weakly organised to turn their needs into effective demands, and accountability mechanisms are too poorly developed to ensure that demands are realised.
Full document: available via document delivery. Please see document summary.

Fiscal decentralisation

The effective implementation of fiscal decentralisation is essential for the success of other forms of decentralisation. Decentralisation of resources and/or the power to raise revenue is necessary in order for local authorities to fulfil their responsibilities and hold genuine decision-making power.

Factors affecting the potential of fiscal decentralisation for poverty reduction include distribution - how to ensure that resources are allocated to poverty reduction between and within regions, effectiveness - how to ensure that fiscal decentralisation allows the effective raising of revenue and financial management across levels of government, and accountability to citizens in decisions about resource use.

Smoke, P., 2001, 'Fiscal Decentralization in Developing Countries: a Review of Current Concepts and Practices', Democracy and Human Rights Programme Paper 2, United Nations Research Institute for Social Development
This UNRISD paper examines the origins, conceptual foundations and practice of fiscal decentralisation in developing countries. The paper questions the validity of common claims made about fiscal decentralisation and makes recommendations about the elements needed for a good decentralisation programme.
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Devas, N., 2002, ‘Issues in Fiscal Decentralisation: Ensuring Resources Reach (the Poor at) the Point of Service Delivery’, paper presented at DFID’s November 2002 Retreat, International Development Department, University of Birmingham, Birmingham
This research paper for DFID investigates the design of inter-governmental transfers and lists approaches to ensuring both that resources are allocated to pro-poor services by local governments, and that allocated resources are actually used for service delivery. Alternative arrangements, such as deconcentrated service delivery, including SWAps, Social Investment Funds and Local funds are also considered.
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Heimans, J., 2002, 'Strengthening Participation in Public Expenditure Management', OECD Policy Briefing no. 22
This OECD Policy Briefing examines participatory budgeting, an approach that may help to promote accountability and responsiveness in local government decision-making. The briefing explains how Participatory Budgeting works, outlines preconditions for its effective operation, and offers advice for donors. The paper provides useful examples from Brazil, Uganda and Bangladesh.
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Decentralisation and citizen participation

The rationale behind devolution (also known as democratic decentralisation) is that it increases participation and promotes civil society activity because people respond to opportunities to make decisions that affect their lives. Where elected bodies have powers and resources to respond effectively, this increased participation can enhance the legitimacy of government. But where they lack powers and resources, increased participation can lead to growing popular cynicism about government.

The issue of whether democratic decentralisation leads to genuine participation of the poor in practice has been extensively debated. The following texts provide country studies, analysing the complexities of particular cases, and drawing out some of the factors that may promote genuine participation.

Devas, N., 2002, 'Local Government Decision-making: Citizen Participation Local Accountability, Examples of Good (and Bad) Practice in Kenya', Building Municipal Accountability Series, International Development Department, University of Birmingham, Birmingham
This paper examines the varying extent of citizen participation and accountability in local authorities in Kenya. It explains the reasons for the general weakness of participation in this area, and provides some positive examples from particular cases.
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Grant, U. 2002, 'Local Government Decision-making: Citizen Participation Local Accountability, Examples of Good (and Bad) Practice in Uganda', Building Municipal Accountability Series, International Development Department, University of Birmingham, Birmingham
Uganda is often regarded as a leading example of developing country democratic decentralisation. This paper examines the extent to which constitutional commitments to local democracy have been transformed into citizen participation and governmental accountability in practice, and highlights the factors that have worked to promote these in certain cases.
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Toolkits

Sisk, T. et al, 2001, 'Democracy at the Local Level: The International IDEA Handbook on Participation, Representation, Conflict Management and Governance', International IDEA, Stockholm 
This handbook offers practical advice on designing systems of local governance, promoting representative local democracy and fostering citizen participation. The handbook defines key concepts and includes case studies, checklists and lists of options for policy-makers in particular settings. 
Access full text: available online

What other resources are available on the GSDRC?

Users of this page may also be interested in the non-state service provision page of the GSDRC's service delivery topic guide.

You can also use the "site search" at the top of the page if you wish to look for wider resources on decentralisation.

Additional information resources

The World Bank's Decentralization Net is a major resource on decentralisation featuring detailed commentary, publications, practical tools, and details and resources from World Bank courses on decentralisation.

UNDP’s webpage on decentralisation, local governance and urban/ rural development outlines UNDP's reasons for supporting decentralisation and providing selected documents.

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